Finance and Strategy: time to wait or time to market?
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Determining the optimal time to enter a market for technology-based products is paramount for the profitability and competitive position of an industrial company. Finance theory and strategic marketing theory seem to differ fundamentally in the answer to the question of how to determine the optimal timing of an investment. Finance theory focuses on the value of waiting to invest, whilst strategic marketing theory stresses early market entry in order to leapfrog competition and gain competitive advantage. We discuss both points of view and synthesize different approaches in order to develop an optimal timing framework for market entry for product innovations. Recent literature on investment under uncertainty, which suggests that a company should invest when the value of a project passes a certain threshold, forms the basis of our attempt to integrate finance and strategic marketing theory.